Question

Evaluate the statement "Accounting is all about numbers.". Using the definition of accounting to justify your answer

Answer 1

Accounting definition:

This is the process of expressing various transactions in numbers and values so that it is understandable how the business is doing. In the process of doing so all figures are summarized, analysed, and reported in particular formats.

Therefore, the giving numbers is a part of accounting but this is not the all. Figures need to be sorted well for understandability. Suppose the sale of items is $20,000; out of that $8,000 is cash sale and $12,000 is credit sale. While representing, the revenue account would be $20,000 with the corresponding cash account is $8,000 and accounts receivable account is $12,000. Although there are numbers like 20,000, 8,000, and 12,000, these are not scattered but presented in meaningful way because of understanding.